Floods and landslides devastated several mountain towns near Rio de Janeiro yesterday, killing at least 257 people as water and mud swept through the region, burying many families as they slept.

The rains also killed 13 people in Sao Paulo state on Tuesday, bringing the total death toll in Brazil's south to at least 270.

Torrential rainstorms, which began yesterday, triggered a series of deadly mudslides in at least three mountaintop towns to the north of Rio. Dozens of people were buried alive as they slept, among them children.

The mountains saw 26cm (10in) of rain fall in less than 24 hours.

The worst hit area was Teresópolis, a popular hillside tourist town around 60 miles north of Rio where at least 130 residents were buried under cascades of terracotta mud and debris. Whole families were buried alive while at least 2,000 people were reportedly forced from their homes.

"My friend has lost 15 relatives today," said Andreia Mattos, who was spending her 45th birthday outside the city's morgue last night surrounded by masked doctors and weeping locals desperately seeking information about missing relatives. "It wasn't just the poor who were hit - it was mansions, everything. It all came down."

Next to her crying women leafed nervously through an A-4 notepad filled with pictures of unidentified corpses, bloated, mud-soaked limbs and babies whose smooth faces had been frozen into peaceful gazes by their sudden deaths. Written on the pad's frontcover were the words: "Victims of the natural disaster - 12.1.11". The Guardian counted at least 8 babies among the photographs, as well as toddlers, teenagers and elderly women.

Around 1,000 people were left homeless as the waters smashed through the town, destroying homes, powerlines and roads. The mayor of Teresópolis, Jorge Mario Sedlacek, decreed a state of emergency, calling the calamity "the worst to hit the town". About 800 search-and-rescue workers from the state's civil defence department and firefighters dug for survivors.

The number of victims was expected to rise as rescuers find more bodies and reach more remote areas.

Brazil's president, Dilma Rousseff, is expected to visit the region tomorrow, while the government this evening announced a R$700m (£265m) package.

The money will go to repairing infrastructure and preventing future disasters.

The president planned to fly over the most severely damaged parts of Rio today as TV images showed residents fleeing the region on foot or in cars and pleading with authorities for assistance.

"Ask for help. There's nothing we can do. There are many families buried," one woman, in floods of tears, told a reporter from Globo television as she abandoned her home.

"There was no way of telling which house would fall. Rich and poor – everything was destroyed," domestic worker Fernanda Carvalho was quoted as saying by the Globo network's website.

Marquinho Maia, a local press officer who was helping out at the morgue said: "We pulled at least 16 bodies out this morning. Kids, old people. All dead. It's horrible. The city has never had so many fatalities.

"I've lost several friends. One of my friends still hasn't found his mum or his wife. Some areas have been completely destroyed."

Speaking after a helicopter flight over Teresópolis, Rio's environment secretary, Carlos Minc, described the mudslides as the worst catastrophe in the region's history.

"I believe the death toll is much higher than has been so far announced," he said. "Many people died in their sleep. The mountainsides are coming down. The areas are very unstable."

Fernanda Carvalho, a 27-year-old maid from the region, told the G1 news website that the disaster had drawn no distinction between rich and poor. "The rich man's house, the poor man's house. Everything was destroyed," she said.

Helicopter images showed at least two stranded locals desperately waving white shirts in a bid to be rescued. Nearby, a thick brown scar had been ripped through one residential area on the town's outskirts, uprooting trees and demolishing everything in its path.

Two other tourist destinations in the same region, Petrópolis and Nova Friburgo, were also badly affected with 25 deaths reported there.

In Nova Friburgo, where at least 97 died after a month's worth of rain fell in 24 hours, four firemen were reported to have been buried alive as they attempted to reach victims..

"There are so many disappeared and so many that will probably never be found," said Angela Marina de Carvalho Silva, who believes she may have lost 15 relatives to the flood, including five nieces and nephews.

"There was nothing we could do. It was hell," she said in a telephone interview.

Carvalho Silva took refuge in a neighbour's house on high ground with her husband and daughter, and watched the torrential rain carry away cars, tree branches and animals and tear apart the homes of friends and family.

"It's over. There's nothing. The water came down and swept everything away," said her husband, Sidney Silva.

The latest mudslides to hit Rio follow similar disasters last April, when several inner city favelas were destroyed by the rains.

In the worst incident, more than 200 people were buried alive when the Morro do Bumba shantytown in Niteroi, over the bay from Rio, collapsed.

Rio state Governor Sergio Cabral said in a statement he had asked the navy for aircraft to take rescue crews and equipment to the region, which was partially cut off from Rio by road.

South-east Brazil is used to heavy rains in January, but this year's weather has been extreme.

At least 13 people died on Tuesday in Sao Paulo state as small towns and even parts of central Sao Paulo were transformed into murky, fast-flowing rivers. Waterlogged motorways in Brazil's economic capital ground to a halt.

This afternoon, as hundreds of rescue workers scrambled to reach the affected areas in Rio, recriminations had already begun as to who was responsible for the high death toll.

Minc told the BBC's Brazil service that politicians had to shoulder their share of the blame for encouraging the illegal occupation of hillsides.